Finance and Economy Ministry offices at the Government Complex Sejong. [Photo by reporter Kim Yu-jin]
The government decided to return to normal issuance of Korean Treasury bonds and other public-sector bonds in the second quarter.
The Finance and Economy Ministry said it held the second meeting of a consultative group of bond-issuing agencies on the 22nd, chaired by Hwang Sun-gwan, director general of the Treasury Bureau, to discuss second-quarter issuance plans.
For Korean Treasury bonds, issuance for May and June will be set within the first-half target range of 55% to 60%. Issuance of major public-sector bonds other than Treasury bonds in the second quarter is expected to rise by about 6 trillion won from the original plan.
The government and issuing agencies had previously agreed to scale back first-quarter issuance to stabilize markets ahead of inclusion in the World Government Bond Index, or WGBI.
A review of first-quarter results showed Treasury bond issuance came in at 61.5 trillion won, the minimum level within the 27% to 30% target range, at 27.5%. For public-sector bonds excluding Treasury bonds, issuance was reduced by about 7 trillion won from the original plan.
The government said it decided to normalize second-quarter issuance after judging that Treasury yields have stabilized on a downward trend despite uncertainty such as the Middle East war and inflation concerns, and that foreign investment inflows have been smooth since WGBI inclusion.
Foreign investors’ net purchases of Treasury bonds totaled 8.5 trillion won on a trade-date basis from March 30 through April 21, and 6.4 trillion won on a settlement-date basis from April 1 through April 21.
Given that most public-sector bonds are short-term issues with maturities of three years or less, the government said it plans to increase the share of medium- to long-term Treasury bonds with maturities of five years or more in the second quarter to minimize supply-demand pressure on the market.
Hwang said, “Since April, the bond market has stabilized with the steady inflow of WGBI funds, but external uncertainty still exists, so monitoring market conditions and coordination among agencies are necessary.” He added, “If needed, we will hold meetings as necessary to consult and adjust issuance volumes and timing.”
The Finance and Economy Ministry said it held the second meeting of a consultative group of bond-issuing agencies on the 22nd, chaired by Hwang Sun-gwan, director general of the Treasury Bureau, to discuss second-quarter issuance plans.
For Korean Treasury bonds, issuance for May and June will be set within the first-half target range of 55% to 60%. Issuance of major public-sector bonds other than Treasury bonds in the second quarter is expected to rise by about 6 trillion won from the original plan.
The government and issuing agencies had previously agreed to scale back first-quarter issuance to stabilize markets ahead of inclusion in the World Government Bond Index, or WGBI.
A review of first-quarter results showed Treasury bond issuance came in at 61.5 trillion won, the minimum level within the 27% to 30% target range, at 27.5%. For public-sector bonds excluding Treasury bonds, issuance was reduced by about 7 trillion won from the original plan.
The government said it decided to normalize second-quarter issuance after judging that Treasury yields have stabilized on a downward trend despite uncertainty such as the Middle East war and inflation concerns, and that foreign investment inflows have been smooth since WGBI inclusion.
Foreign investors’ net purchases of Treasury bonds totaled 8.5 trillion won on a trade-date basis from March 30 through April 21, and 6.4 trillion won on a settlement-date basis from April 1 through April 21.
Given that most public-sector bonds are short-term issues with maturities of three years or less, the government said it plans to increase the share of medium- to long-term Treasury bonds with maturities of five years or more in the second quarter to minimize supply-demand pressure on the market.
Hwang said, “Since April, the bond market has stabilized with the steady inflow of WGBI funds, but external uncertainty still exists, so monitoring market conditions and coordination among agencies are necessary.” He added, “If needed, we will hold meetings as necessary to consult and adjust issuance volumes and timing.”
* This article has been translated by AI.
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